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Unilever has unveiled a broad strategic revamp in bid to shore up investor support in the wake of a failed takeover approach for the multinational from Kraft Heinz.

In a statement on Thursday, the consumer group said it would buy back €5bn of its shares, bump up dividends by 12 per cent, combine its foods and refreshments businesses, and dispose of its underperforming spreads business, which encompasses Flora and I Can’t Believe It’s Not Butter.

The company has been under pressure to increase profits since private equity firm 3G and US rival Kraft Heinz abandoned efforts to buy it, judging that a protracted public battle over Unilever would have done more harm than good.

Unilever said combining its food and refreshment division, would “unlock future growth and faster margin progression”.

The company also announced an acceleration of its “zero based budgeting” and other efficiency programmes with the goal of adding 80 basis points (0.8 percentage points) to its operating profit margin. Zero based budgeting is where managers have to justify every expense every year from zero and puts them under permanent pressure to cut costs.

Paul Polman, chief executive, said:

Our recent review concluded once more that our strategy for long-term value creation through growth and compounding returns on investment is the right one for Unilever and for our shareholders. It also highlighted the opportunity to go faster and further.

We will support our business with a higher level of leverage, while retaining the benefits of a strong credit rating. This will enable us to enhance value for shareholders through increased capital returns, while maintaining operational and strategic flexibility.

Unilever added that its corporate structure, which means it is listed in both Amsterdam and London, made it more complicated to buy or dispose of businesses.

This had become apparent as it looked into disposing the spreads business. It said it would complete a review of its structure this year “with the objective of achieving greater simplification and strategic flexibility”.